Majority of Aztec Theatre building to become apartments

The owner of the Aztec Theatre and 210 Developers have struck a deal that will add 41 apartments to downtown’s core — the area’s first infusion of for-rent dwellings since 2008, when the 247-unit Vistana was completed.

The joint venture will convert Class C office space on floors 3 through 6 of the six-story Aztec building, 104 N. St. Mary’s St., into the apartments.

“This project could serve as a model for other buildings that have first floor occupancy but the above floors remain vacant,” Assistant City Manager Lori Houston said in an email.

The number of apartments, though a blip compared with larger projects in the downtown area, are significant because they are a rarity.

Spearheading former Mayor Julian Castro’s “Decade of Downtown” strategy is the addition of more residential units — apartments and condos — in the core to counterbalance downtown’s heavy tourist population. In 2011, an incentives policy was created to help advance Castro’s plan.

The incentives strategy has produced roughly 5,000 units, city officials estimate, but all of them have gone up in downtown’s fringes — mostly along Broadway, in and around the Pearl, and in Southtown.

The Aztec’s construction start date and rents still are up in the air, according to 210 Developers. Sam Panchevre, controlling partner of Aztec Family Group, which purchased the Aztec in 2014, said he hopes construction will begin in January and for the units to be available for rent by early 2016.

“We are keeping the structural integrity that’s already there — all these walls that were built in the 1920s are concrete,” Panchevre said. “We will keep the integrity of the design and basically remodel the office space into some cool apartments.”

In 210 Developers’ incentives application to the city, the local developer priced the project at $5.2 million, Houston said. Under the incentives program, the Aztec project would qualify for $16,609 in city fee waivers, $279,209 in a 15-year tax reimbursement grant, and a $246,000 loan, Houston said. The project does not need SAWS fee waivers.

Most of the downtown core’s apartments were offices or hotel rooms before being converted — including the adjoining 98-unit Brady and Majestic Theater towers on East Houston Street and the 41-unit Exchange Building on East Pecan Street. Both were made into residential units in the early 1990s.

Other conversion include the Maverick Building and the former Robert E. Lee hotel.

In 2008, developer Ed Cross completed the Vistana on North Santa Rosa and West Houston streets, and city officials hoped the massive project covering an entire city square block would spur other development in the core. But the financial crisis killed the momentum before it even started.

Only now are developments beginning to inch away from the Pearl and Southtown and closer to where the taller buildings are.

The 350-unit Agave apartment building, on a riverfront site formerly occupied by the Univision TV station, is under construction on East Cesar E. Chavez Boulevard, which separates downtown from Southtown.

And 210 Developers currently has two projects in the works on the western edge of downtown: the 242-unit Vitré, the former Toudouze wholesale grocery building on West Commerce Street, where construction is expected to start soon, and the 102-unit Peanut Factory Lofts, on South Frio Street, which is near completion.

The Aztec deal will be the first multifamily project in the downtown core to receive the relatively new city incentives.

“These 41 units will be the first residential units built in the core of downtown and hopefully be the first of many,” Houston said.

The Aztec Theatre has a rich if rocky history. It opened in 1926, and the next year, it showed the city’s first talking picture, “Don Juan,” with John Barrymore. Over the years, the property changed hands many times, including in 1988, when the San Antonio Conservation Society bought the building after real estate speculators expressed interest in demolishing it.

In 2014, Panchevre bought the building from Baron Theo Bracht of Belgium, and converted the theater into a live music venue. The theater’s operating group, now controlled by the House of Blues’ Live Nation International, has been booking concerts at the Aztec since 2014.

Floors 1 and 2 are left for the theater and its staff. Now, Panchevre’s focus turns to leasing the 12,000 square feet of retail space at the River Walk level, which he wants to fill with a local restaurant.

The deal, first reported by the San Antonio Business Journal, should add more vibrancy to the intersection of Commerce and North St. Mary’s streets, one of downtown’s busiest intersections in terms of foot traffic. Across North St. Mary’s Street from the Aztec, downtown property owner Chris Hill has plans to convert the long-derelict Mortgage Investment Corp./Sullivan Bank buildings into an 18-story boutique hotel.

Benjamin Olivo started at the Express-News in 1996 taking down high school football starts on Friday night's in the sports department. He's also worked on the Metro, business and features desks. He's been writing about downtown San Antonio on The Downtown Blog on mySA.com since June 2008, and in the weekly Downtown Dispatches column in the Express-News since spring 2012.